Where does the generic large-load tariff docket stand and are there differences in framework between the two Carolinas?

Multiple dockets and tariff opportunities are being pursued across states, all grounded in existing contract provisions (minimum-take, refundable deposits, clawbacks) that ensure data centers pay their fair share; tariffs will add to protections already in the contracts. Discussions are underway in SC, NC, Florida and other states. “This is billions of dollars over the life of these contracts that are going to go to help offset the fixed system costs that we have with the larger loads.”

Any detail on counterparty/terms of the tax-credit monetization, and other affordability tools available?

Brian explained they moved to a multiyear forward contract with an undisclosed counterparty that has a healthy tax appetite, after testing the market and securing discounts as good or better than seen before; predetermined values lock in customer value and avoid annual auction churn. Expect the company to continue this approach. “this is a forward contract. So we're going to the tax credits and sell them in those given years, but we predetermined the set value for our customers”

Would Duke join a utility/hyperscaler/government consortium on new AP1000 builds, and what's needed to move forward?

Nuclear is important (11 reactors, ~$600M/yr customer tax credits) but the near-term focus is maximizing existing reactors via ~300 MW of uprates and life extensions. Duke will not proceed on new build until three risks are resolved: first-of-a-kind technology risk, supply-chain/workforce availability, and financial-risk protection against overruns for both customers and investors. “we will not make any moves until we get those 3 questions answered”

DUK

Duke Energy (DUK) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Utilities· May 5, 2026

Source: earnings call transcript

Executive summary

Duke Energy Q1 FY26 — Data-center ESAs reach 7.6 GW as $5B+ in customer benefits secured

Duke is leaning fully into a once-in-a-generation regulated build cycle, converting data-center interest into signed load materially faster than a year ago while pairing every investment with customer-benefit offsets to defend affordability ahead of pending Carolinas rate cases. Asset-sale proceeds and low-cost financing de-risk funding of its capital plan, underpinning confidence in accelerating, top-half growth from 2028 as contracted loads ramp.

Highlights

Q1 adjusted EPS of $1.93 (reported $1.97) vs. $1.76 a year ago, on track for the $6.55-$6.80 full-year range
Signed an incremental 2.7 GW of data-center ESAs in Q1 (more than half of all of last year's signings), lifting total executed ESAs to ~7.6 GW with nearly 2/3 already under construction
Received >$5B of proceeds: $2.8B from Brookfield's first tranche (9.2% of Duke Energy Florida) plus $2.5B from the Piedmont Natural Gas Tennessee sale to Spire
Secured >$5B of customer benefits — up to $3.1B of clean-energy tax-credit monetization through 2028 and $2.3B of Carolinas-merger savings through 2040 (all regulatory approvals received)
Balance sheet strengthened toward 14.5% FFO/debt in 2026, aided by a $1.5B 3% convertible note issuance replacing higher-cost debt; celebrated 100th consecutive year of paying a quarterly dividend

Concerns

Higher O&M from winter-storm response and higher depreciation on a growing asset base partially offset the $0.16 Electric segment gain (management calls the storm O&M largely timing, still targeting flat full-year O&M)
NC rate cases for DEC and DEP remain unsettled with intervenor testimony not due until end of May, amid heightened affordability/regulatory scrutiny
New nuclear build remains stalled — management will not proceed until first-of-a-kind technology, supply-chain/workforce, and cost-overrun financial-risk questions are resolved
Growth increasingly concentrated in a small number of hyperscaler/data-center large-load customers

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 adjusted EPS	$6.55-$6.80 high materiality	FY2026 · FY26	High
Long-term adjusted EPS growth rate	5% to 7% through 2030 high materiality	through 2030 · FY30	High
Position within EPS growth range	Top half of the 5%-7% range beginning in 2028 high materiality	2028 onward · FY28	High
FFO to debt	14.5% in 2026 high materiality	FY2026 · FY26	High
FFO to debt (long term)	15% over the long term medium materiality	long term	Medium
Full-year O&M	Flat for the full year medium materiality	FY2026 · FY26	Medium
Generation capacity additions	Adding 14 GW of generation over the next 5 years high materiality	next 5 years (through ~2031)	High
Carolinas utility combination (DEC + DEP) effective date	Effective January 1, 2027; ~$2.3B customer savings through 2040 high materiality	effective Jan 1, 2027 · FY27	High
SC Anderson County 1.4 GW combined-cycle plant construction start	Construction expected to begin in 2027 medium materiality	2027 · FY27	Medium
Large-load / data-center energy ramp	Customers begin taking energy as early as 2H 2027 into 2028, ramping to full contracted load through the early 2030s high materiality	2H 2027 through early-to-mid 2030s	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Electric Utilities and Infrastructure Driven by infrastructure investments to reliably serve growing jurisdictions plus favorable (colder) weather; partially offset by higher O&M and depreciation on a growing asset base. Colder-temperature usage gains were offset by higher winter-storm O&M, viewed as largely timing. EPS contribution YoY: +$0.16	—	—	—	+$0.16 EPS contribution YoY
Gas Utilities and Infrastructure Contributions from riders and customer growth, partially offset by higher depreciation expense. EPS contribution YoY: +$0.01	—	—	—	+$0.01 EPS contribution YoY
Other The Other segment was essentially flat to the prior year. EPS contribution YoY: ~$0.00	—	flat YoY	—	essentially flat vs. prior year

Deals & partnerships

Undisclosed tax-credit counterparty (healthy tax appetite) Clean-energy tax-credit monetization (multiyear forward contract) Up to $3.1B of clean-energy tax credits Multiyear, credits generated through 2028

Forward contract locking in a predetermined value for customers rather than annual auctions; management expects to continue this approach and cited discounts as good or better than any market seen.

Duke Energy Carolinas / Duke Energy Progress (internal combination) Merger / utility combination ~$2.3B estimated customer savings through 2040 Savings through 2040

Combining the two Carolina utilities; a lever management may use to accelerate tax-credit amortization and mitigate rate-case increases.

Brookfield Minority equity investment in Duke Energy Florida $2.8B cash for a 9.2% interest

First tranche of a minority investment in the Florida utility announced last year.

Spire Divestiture — sale of Piedmont Natural Gas Tennessee $2.5B

Sale completed several weeks after the Brookfield first-tranche close.

GE (Vernova) Turbine framework / supply agreement

First turbines being built; turbines for the first Person County combined-cycle project expected in 2H 2026. Company name partly [indiscernible] in transcript.

Zachry EPC contracts for first 3 Carolinas gas generation facilities

Person County and Marshall plant construction timelines deliberately staged; supports developing/retaining a local craft pool.

Capital programs

$103 billion capital plan underway $103B

Funding: Internal cash flows, efficient recovery mechanisms, >$5B of asset-sale proceeds (Brookfield DEF tranche + Piedmont TN sale), $1.5B 3% convertibles, and $300M forward ATM equity

Benefit:Grid reliability/hardening, generation build, and large-load infrastructure across regulated jurisdictions

Described as the industry's largest regulated capital plan; asset-sale proceeds strengthen credit and help fund it at the lowest cost of capital.

All-of-the-above generation build (14 GW / 5 years) underway

Benefit:14 GW of new generation plus nuclear life extensions and ~300 MW of uprates

Includes gas builds, nuclear uprates/life extension, and renewables; supports large-load growth.

Gas generation program underway

Spent to date: 5 GW under construction; 2.5 GW in development

Benefit:7.5 GW of dispatchable gas capacity (5 GW under construction + 2.5 GW development), incl. 1.4 GW SC Anderson County combined cycle and Indiana Cayuga combined cycle

EPC contracts signed with Zachry for first three Carolinas facilities (Person County, Marshall); GE framework agreement secures long-lead turbines; Indiana Cayuga recovered via CWIP rider; SC Anderson County is first new SC baseload in a decade.

Nuclear uprate and life-extension program underway

Spent to date: ~300 MW of uprates in execution

Benefit:~300 MW of uprates plus subsequent license renewals extending fleet life (Robinson approved by NRC in April, 2nd plant); intend to seek extensions for all remaining reactors

11-reactor fleet is foundational to strategy; new nuclear build deferred pending technology, supply-chain/workforce, and cost-overrun financial-risk resolution.

Risks & headwinds

Rate-case / regulatory and affordability risk (NC DEC & DEP) through 2026 (testimony end-May, settlement discussions thereafter)

Cases unsettled; intervenor testimony for DEC due end of May; management deploying >$5B of customer benefits ($3.1B tax credits + $2.3B merger savings) to mitigate

Mitigation:Constructive regulatory engagement, potential settlement, tax-credit amortization acceleration and other affordability levers

Higher O&M from winter-storm response Q1 FY26 (timing)

Elevated Q1 storm O&M offset colder-weather usage gains; not separately dollar-quantified

Mitigation:Storms are budgeted with solid recovery mechanisms; full-year O&M still targeted flat

Higher depreciation on a growing asset base ongoing

Partial offset to the +$0.16 Electric and +$0.01 Gas segment gains; not separately quantified

Mitigation:Recovery via rate mechanisms and rider structures

New nuclear build execution risk open-ended

Not quantified; build deferred pending resolution

Mitigation:Focus on existing-fleet uprates (~300 MW) and life extensions; will not proceed on new build until first-of-a-kind technology, supply-chain/workforce, and financial cost-overrun protections are resolved; maintaining optionality in IRPs

Concentration in hyperscaler / data-center large-load customers medium to long term (ramp 2H 2027 into early-to-mid 2030s)

~7.6 GW executed ESAs and 15.4 GW pipeline concentrated in data-center customers

Mitigation:Contract protections: minimum-demand provisions, credit support, refundable capital advances, termination/clawback charges; disciplined focus on deliverable counterparties

Financing / interest-rate cost risk on heavy capital plan ongoing

$103B capital plan funded partly through continuous debt issuance

Mitigation:$1.5B 3% convertibles replacing higher-cost debt, forward-priced ATM equity, >$5B asset-sale proceeds, and efficient recovery mechanisms keeping FFO/debt at 14.5% (2026) with cushion to downgrade thresholds

Legislative / large-load cost-sharing policy uncertainty current legislative sessions

Not quantified; bills on data-center tax incentives and cost-sharing mechanisms under discussion

Mitigation:Management says most proposals codify provisions already in Duke's contracts; active engagement with legislators and regulators

Q&A highlights

Given cases are proceeding on schedule, is there potential to settle them, and how should expectations be set against a noisy backdrop?

Management works closely with regulators/stakeholders; the next milestone is intervenor testimony later in May, after which more extensive settlement discussions are expected. They are always open to settlement but feel they have a strong case to litigate, and pointed to the >$5B of customer savings as one of several affordability tools.

“we will have more extensive discussions on settlement opportunities. We always are open to that, but we also feel like we have a strong case if we have to litigate it.”

asked by Julien Dumoulin-Smith · answered by Harry Sideris

4 min read 6 chapters

Detailed narrative

Q1 2026 earnings and segment drivers

Duke reported Q1 reported EPS of $1.97 and adjusted EPS of $1.93, up from $1.76 (both bases) a year ago. Electric Utilities and Infrastructure contributed +$0.16, driven by infrastructure investments to serve growing jurisdictions plus favorable (colder) weather, partially offset by higher O&M and depreciation on a growing asset base; colder-temperature usage gains were offset by higher winter-storm O&M, which management characterizes as largely timing against solid recovery mechanisms.

Gas Utilities and Infrastructure added +$0.01 on riders and customer growth net of higher depreciation, and the Other segment was essentially flat. Note: the transcript's speaker tags are garbled — CEO Harry Sideris's remarks are labeled 'Steven Fleishman (Analysts)' and several Q&A management answers are labeled 'David Hauser (Executives),' who is not a participant; the operator introduced only Harry Sideris (CEO) and Brian Savoy (CFO).

Economic development and data-center ESAs

Duke signed an incremental 2.7 GW of data-center ESAs since the Q4 call — more than half of all it signed last year — bringing total executed electric service agreements to ~7.6 GW, nearly two-thirds of which are already under construction.

Its late-stage, high-confidence pipeline (inclusive of signed ESAs) now stands at 15.4 GW, and management expects to convert additional prospects to ESAs over the next 12 months. Contracts include minimum-demand provisions, credit support, refundable capital advances and termination charges so large customers 'pay their fair share,' spreading fixed system costs over a larger base to benefit existing customers.

Management cited accelerating interest with emerging hubs around Charlotte NC, Florida and Southern Indiana.

Generation build — gas and nuclear

Duke is adding 14 GW of generation over five years. Its gas program has 5 GW under construction plus 2.5 GW in development; SC regulators approved a 1.4 GW combined-cycle plant in Anderson County (first new SC baseload in a decade, construction from 2027), and Indiana implemented a CWIP rider for the Cayuga combined-cycle plant.

EPC contracts for the first three Carolinas gas facilities are signed with Zachry (Person County, Marshall), and GE turbines for the first Person County project are expected in 2H 2026. On nuclear, the NRC approved a subsequent license renewal for Robinson (second plant), ~300 MW of uprates are in execution, and the 11-reactor fleet provides ~$600M/yr of tax credits to customers; new nuclear build remains gated on technology, supply-chain/workforce and cost-overrun financial-risk resolution.

Customer affordability and $5B+ of benefits

Management stressed rates below the national average and rising below inflation, and announced two accomplishments delivering more than $5 billion of customer benefits: a multiyear agreement to monetize up to $3.1 billion of clean-energy tax credits expected to be generated through 2028 (a forward contract at predetermined discounts, proceeds flowing to customers), and $2.3 billion of estimated savings through 2040 from combining the two Carolina utilities.

Nuclear-generated tax credits of nearly $600 million per year also flow to customers. Management framed tax-credit monetization as a lever that could accelerate amortization to hold rates lower during the pending rate cases.

Balance sheet and financing

Duke received over $5 billion in March — $2.8 billion from Brookfield's first tranche (9.2% of Duke Energy Florida) and $2.5 billion from selling Piedmont Natural Gas Tennessee to Spire — strengthening credit and helping fund the $103 billion capital plan at the lowest cost of capital.

It issued $1.5 billion of 3% convertible senior notes (replacing higher-cost debt) and priced $300 million of forward equity under its ATM to settle December 2027, aligned to future equity needs. This keeps FFO/debt on track to 14.5% in 2026 and 15% long term with cushion to downgrade thresholds, and the company marked its 100th consecutive year of paying a quarterly dividend.

Regulatory landscape

The DEC and DEP North Carolina rate cases are proceeding on schedule, with intervenor testimony for DEC due at the end of May and settlement discussions likely to intensify thereafter (management open to settlement but confident in litigating). In South Carolina, Duke filed its initial electric rate stabilization adjustment in mid-March under 2025 legislation, enabling annual true-ups that reduce rate volatility.

Duke is also pursuing generic large-load tariff dockets across SC, NC, Florida and other states to codify the fair-share provisions already embedded in its contracts. Management flagged legislative-session activity on data-center cost-sharing as broadly aligned with its existing contract structures.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.